Althea has narrowed its full-year revenue guidance downward as chief executive Josh Fegan and chief financial officer Robert Meissner prepare to absorb a 25% reduction in their cash salaries, a move aimed at preserving capital after the company achieved positive operating cash flow for the quarter.
For the three months ending September, the company posted revenue of A$8.3 million, a 6.4% increase on the previous quarter, though the figure sat 22% below the equivalent period a year earlier.
Medicinal cannabis product sales generated unaudited revenue of $2.1m, a steep drop from the $4.9m recorded in Q1 FY24 and below the $2.9m from the prior quarter.
Continued cost discipline and tighter spending controls pushed net cash from operating activities into positive territory, with the company recording $304,000.
In its quarterly update to the Australian Securities Exchange (ASX), Althea confirmed that directors, the CEO, and the CFO will have 25% of their cash salaries converted into performance rights beginning in November.
“Subject to AGM approval, the move will further align management and directors’ interests with the company’s future performance, whilst conserving cash,” the company said.
Althea updated its full-year guidance, now projecting revenue of between $50m and $57m, reduced from the prior target of $60m, while earnings before interest, tax, depreciation and amortisation (EBITDA) is anticipated to fall between $4m and $5.5m, down from the earlier forecast of $7m.
On the weaker medicinal cannabis figures, Althea attributed the shortfall to “temporary stock outages” during the period.
“Althea is focused on swiftly recovering to its recent quarterly receipts revenue of $4.9m following temporary stock outages… associated with previous suppliers,” it said.
“With full stock availability expected to return to normal in November, the company is confident of a rapid and full rebound in sales.”
On a brighter note, recreational product sales through Canadian operation Peak Processing climbed to a record high of $6.2m.
